New EPC ratings guidance for landlords and residential properties


22nd July 2020

Ways to improve energy efficiency in households, including Energy Performance Certificate (EPC) ratings guidance, are being reviewed with homeowners and landlords having responsibility to reduce carbon footprints.

What are EPCs?

In October 2008, the Government introduced Energy Performance Certificates (EPCs) in England and Wales to combat our global carbon footprint.

An EPC is a certificate, issued by an assessor, which displays information about the energy efficiency of a property. The certificate gives a rating from A (very efficient) to G (inefficient) and therefore informs you of how costly it will be to heat and light a building. The EPC will conveniently state what the energy efficiency rating could be if you made the recommended improvements, highlighting cost-efficient ways to achieve a better rating.  The certificate is valid for 10 years.

EPCs are required whenever a property is built, sold or rented and it should be made available at the earliest opportunity; unless the seller/landlord has a legitimate excuse for not making an EPC available or where the property is exempt from the EPC requirements.

New EPC Requirements in 2020

In 2018, EPC requirements changed for landlords, the Minimum Energy Efficiency Standards (MEES) came into force. These rules meant that all rental properties of new tenancies and renewals had to have a minimum EPC rating of ‘E’ or above.

Since 1 April 2020, the MEES will apply to all existing tenancies. This means that if your property does not have a valid EPC rating of ‘E’ or above, it cannot be let.

Guidance for landlords

Firstly, if you do not have a valid EPC or your rating is below ‘E’, book your Energy Assessment as soon as possible to check your current rating.  An accredited assessor will assess your property and produce the EPC.

As a property owner, you have a legal responsibility to make the necessary changes in your EPC report to obtain an ‘E’ or above rating. However, the new rules stipulate that landlords will never be required to spend more than £3,500 (including VAT) on energy efficiency improvements.

If you cannot make the necessary improvements for £3,500 or less, you should make all the improvements that can be made up to that amount, and then register an ‘all improvements made’ exemption on the PRS Exemption Register.

Selecting Energy Efficient Measures

Your EPC report will include a list of recommendations detailing measures, which should improve the energy efficiency of your property. It will also include the indicative cost of implementing such measures along with the typical savings per year and your property’s rating after improvement.

Penalties

If your property does not have a valid EPC, you cannot legally let it. If your local authority believes a landlord has failed to fulfil their obligations under the MEES Regulations, they can serve the landlord with a compliance notice. If a breach is found, the landlord may receive a financial penalty. The maximum amount you can be fined per property is £5,000.

It is worth mentioning that whilst the new April 2020 rules are now in place, the Government is committed to the long-term improvements of energy performance standards of privately rented homes in England and Wales. There is an aim that by 2030 most homes will be upgraded to EPC Band C, so it is important to note that more changes will likely be happening in the near future.

Energy efficiency Green Homes Grant

On 8 July, the Chancellor, Rishi Sunak, announced that there will be a £2 billion Green Homes Grant.

From September 2020, homeowners and landlords will be able to apply for vouchers to make their homes more energy efficient.

The grants will cover at least two thirds of the cost, up to £5,000 per household and for low income households, the vouchers will cover the full cost up to £10,000. Details about how to apply for the grant will be announced.

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